State Sen. Walters cleared in conflict investigation

April 9, 2013

Updated Aug. 21, 2013 1:17 p.m.

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In this undated photo provided by Mimi Walters 2010 Campaign For Treasurer shows state Sen. Mimi Walters, of Lake Forest, a Republican who is running unopposed in the June 2010 primary. THE ASSOCIATED PRESS

In this undated photo provided by Mimi Walters 2010 Campaign For Treasurer shows state Sen. Mimi Walters, of Lake Forest, a Republican who is running unopposed in the June 2010 primary. THE ASSOCIATED PRESS

SACRAMENTO – Orange County state Sen. Mimi Walters has been cleared of wrongdoing in a conflict-of-interest probe into phone calls made by her office on behalf of a company once co-owned by her husband.

The California Fair Political Practices Commission launched an investigation in June after it was revealed that one of the senator's aides repeatedly called prison officials in late 2011 and early 2012 to inquire about the status of a financial claim filed by Drug Consultants, Inc., a staffing company co-owned at the time by Walters' husband David.

The company, which provided pharmacists to California prisons, filed a claim with the California Victim Compensation and Government Claims Board in 2011, alleging that the state had underpaid for its services. The commission approved a $74,400 payout to the company in February 2012.

Last summer, it was revealed that a Walters staffer, D. Everett Rice, had made phone calls to three state agencies inquiring about the status of the claim before the commission's decision. At the time, the senator said her office would have made such calls for any constituent with business before the state, but the revelation prompted an investigation by the state's political watchdog nonetheless.

On Tuesday, the Fair Political Practices Commission sent Walters' attorney, Charles H. Bell, a letter saying "there is insufficient evidence" that Walters did anything wrong.

"Although this activity creates the appearance of a conflict of interest since the claim was with regard to Sen. Walters' husband's company, the contacts by Mr. Rice do not rise to the level of attempting to influence the decisionmaking of the three agencies involved with the processing of the claim," wrote Galena West, senior commission counsel for the Enforcement Division of the Fair Political Practices Commission. "All three agencies stated that Mr. Rice only ever asked for a status update and never spoke about the claim itself."

The letter continues: "However, even though this was treated as a routine constituent request for help by the Senator's office, the very nature of engaging an agency on an issue with which the Senator has a material financial interest puts her at great risk of crossing the line into participating or influencing a state governmental decision. More care should be taken in the future to avoid such situations."

Asked about being cleared in investigation, Walters said on Tuesday: "We didn't believe were doing anything wrong. We were just providing help to a constituent, which my office does on a regular basis."

In October, the state prison system canceled its contract with Drug Consultants after it was reported that several dentists and pharmacists who subcontract with it and another company connected to David Walters, American Healthcare Recruiting, had failed to pay them. Walters reported in an economic disclosure form filed last month that her husband disposed of his interest in Drug Consultants and Monarch Staffing, a parent company of Drug Consultants and American Healthcare Recruiting, in April 2012.

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